| CATEGORY: INTERNATIONAL ECONOMIC |
Fri 03 Aug 2012
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LONDON (SHARECAST) - -Overall activity rises at only modest rate
-Total employment down for fifth month running
-Service sector business confidence dips to lowest in seven months
-HSBC says economic slowdown has stabilized but more policy moves needed
The HSBC/Markit Chinese service sector purchasing managers´ index for the month of July has come in at 53.1, following last month´s reading of 52.3.
The composite index, which combines results from the service sector survey with those from manufacturing, improved to 51.9 after 50.6 in the month before.
The latest rise came on the back of a increase in new order volumes. However, the rate of new business growth remained below-trend.
Sub-par new order growth meant that capacity was little tested in China’s service sector, with backlogs of work falling for a sixth month in a row.
Jobs growth in China’s service sector also remained below trend in July, despite picking up from the month before.
The rate of input price inflation in the service sector quickened slightly since the month before, but nevertheless remained lacklustre.
Chinese service providers remained confident regarding the one-year outlook for activity in July.
Commenting on the China Services and Composite PMI data, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said:
“The modest gain in July’s HSBC services and manufacturing PMIs implies that the slowdown of the Chinese economy is likely to have stabilized. That said, the pace of expansion suggested by the composite PMI remained only modest and is not sufficient to warrant a meaningful recovery. To secure growth and employment, Beijing still needs to step up policy easing and fast falling inflation allows them to do so.”
In parallel, the official service sector purchasing managers’ index fell to 55.6 from 56.7 in June, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
AB
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